When it comes to analyzing balance sheets, there are retailers, and there is everyone else.  Retail-based businesses need to worry about inventory levels, sales markdowns, cash balances and many other balance sheet items throughout the year, especially as many are profitable only during the holidays.            … Read More

When it comes to analyzing balance sheets, there are retailers, and there is everyone else.  Retail-based businesses need to worry about inventory levels, sales markdowns, cash balances and many other balance sheet items throughout the year, especially as many are profitable only during the holidays.             Edward Altman developed the “Z-Score” methodology in 1968.   That’s why Edward Altman, professor of New York University’s Stern School of Business, devised a broad measure of a retailer’s financial health. Ever since he developed his “Z-Score” methodology in 1968, investors have been using his gauge to see how their own retail investments are stacking up. Read More

Of the 11 sectors covered by S&P Capital IQ, only one is on track for lower profits in 2013: technology.  The profit anemia stems from several factors, including: Extremely low levels of government spending due to the current sequester. Depressed sales activity in Europe. The tech sector has more exposure to Europe than any other sector. A lack of any hot new products or trends to trigger interest among buyers. #-ad_banner-#Yet as we’ve… Read More

Of the 11 sectors covered by S&P Capital IQ, only one is on track for lower profits in 2013: technology.  The profit anemia stems from several factors, including: Extremely low levels of government spending due to the current sequester. Depressed sales activity in Europe. The tech sector has more exposure to Europe than any other sector. A lack of any hot new products or trends to trigger interest among buyers. #-ad_banner-#Yet as we’ve noted many times, several tech firms are sitting on stunning levels of cash. Cisco Systems (Nasdaq: CSCO), Microsoft (Nasdaq: MSFT), Oracle (Nasdaq: ORCL) and others may have a hard time generating organic growth, but they have a long track record of acquisitions to help get the needle moving. Though it’s unwise to buy a stock simply because you suspect it is a buyout candidate, you can’t ignore a company’s appeal in a merger and… Read More

When it comes to analyzing balance sheets, there are retailers, and there is everyone else.  Retail-based businesses need to worry about inventory levels, sales markdowns, cash balances and many other balance sheet items throughout the year, especially as many are profitable only during the holidays.            … Read More

When it comes to analyzing balance sheets, there are retailers, and there is everyone else.  Retail-based businesses need to worry about inventory levels, sales markdowns, cash balances and many other balance sheet items throughout the year, especially as many are profitable only during the holidays.             Edward Altman developed the “Z-Score” methodology in 1968.   That’s why Edward Altman, professor of New York University’s Stern School of Business, devised a broad measure of a retailer’s financial health. Ever since he developed his “Z-Score” methodology in 1968, investors have been using his gauge to see how their own retail investments are stacking up. Read More

As many companies have spent the past few years rebuilding their sales and profits after a deep slide in 2008 and 2009, a handful of companies are still struggling to regain altitude. Their own income statements were decimated… Read More

Over the past year, economists have noticed an unusual pattern as they digested the series of monthly reports on housing, consumer confidence, purchasing managers, trade flows and other key economic inputs.#-ad_banner-# These reports showed consistently mixed signals, though it was clear that the U.S. economy was faring OK. And that has led to hopes of more consistently positive reports in the second half of 2013 and into 2014. By next year, many economists have come to expect a firmer backdrop, with… Read More

Over the past year, economists have noticed an unusual pattern as they digested the series of monthly reports on housing, consumer confidence, purchasing managers, trade flows and other key economic inputs.#-ad_banner-# These reports showed consistently mixed signals, though it was clear that the U.S. economy was faring OK. And that has led to hopes of more consistently positive reports in the second half of 2013 and into 2014. By next year, many economists have come to expect a firmer backdrop, with GDP perhaps growing in the 2.5% to 3% range. Yet it may be time to start questioning that brightening outlook. Perhaps the greatest measure of economic activity — one ignored by most investors, unfortunately — is flashing yellow and may soon be flashing red.  85 Inputs While many economic surveys aim to capture a slice of the U.S. economy, the Chicago Fed’s National Activity Index (CFNAI) looks at 85 different economic inputs focused on production,… Read More

As we head into the final week of the quarter, expect a fair number of companies to lower their guidance. And though it may seem counterintuitive, get ready to put some cash to work. When It Is An Overreaction? Of course, when these companies deliver a dose of bad news, their shares can get pummeled. Yet we’ve all seen those quick sell-offs followed up by a nice rebound. The key… Read More

As we head into the final week of the quarter, expect a fair number of companies to lower their guidance. And though it may seem counterintuitive, get ready to put some cash to work. When It Is An Overreaction? Of course, when these companies deliver a dose of bad news, their shares can get pummeled. Yet we’ve all seen those quick sell-offs followed up by a nice rebound. The key is to quickly research the situation to see which sell-offs are deserved and signal “dead money” for the coming months, and which sell-offs are likely to be short-lived. We can look to travel website Priceline.com (Nasdaq: PCLN) as an example. Over the past few years, I’ve noted how investors tend to dump the stock whenever short-term trends lead the company to lower near-term guidance. For example, in August 2011, I noted that a decent but not great outlook for the next quarter… Read More

As we head into the final week of the quarter, expect a fair number of companies to lower their guidance. And though it may seem counterintuitive, get ready to put some cash to work. When It Is An Overreaction? Of course, when these companies deliver a dose of bad news, their shares can get pummeled. Yet we’ve all seen those quick sell-offs followed up by a nice rebound. The key… Read More

As we head into the final week of the quarter, expect a fair number of companies to lower their guidance. And though it may seem counterintuitive, get ready to put some cash to work. When It Is An Overreaction? Of course, when these companies deliver a dose of bad news, their shares can get pummeled. Yet we’ve all seen those quick sell-offs followed up by a nice rebound. The key is to quickly research the situation to see which sell-offs are deserved and signal “dead money” for the coming months, and which sell-offs are likely to be short-lived. We can look to travel website Priceline.com (Nasdaq: PCLN) as an example. Over the past few years, I’ve noted how investors tend to dump the stock whenever short-term trends lead the company to lower near-term guidance. For example, in August 2011, I noted that a decent but not great outlook for the next quarter… Read More

The term “fracking” — referring to the hydraulic fracturing of rock formations to tap into seams of natural gas deep underground — is controversial. Consumers have expressed concerns that fracking may cause groundwater contamination, and regulators are studying the issue. The good news: Proper safeguards can help fracking unlock America’s vast trove of natural gas in ways that don’t despoil the environment, and several companies are gearing up to help the cause. Oil services giant Schlumberger (NYSE: SLB), for example, is now selling… Read More

The term “fracking” — referring to the hydraulic fracturing of rock formations to tap into seams of natural gas deep underground — is controversial. Consumers have expressed concerns that fracking may cause groundwater contamination, and regulators are studying the issue. The good news: Proper safeguards can help fracking unlock America’s vast trove of natural gas in ways that don’t despoil the environment, and several companies are gearing up to help the cause. Oil services giant Schlumberger (NYSE: SLB), for example, is now selling fracking fluids that have a much more benign environmental footprint, and rivals are coming up with their own solutions as well. #-ad_banner-# Still, for these fluids to work effectively, fresh water needs to be trucked in, and post-fracking wastewater needs to be trucked away from drilling sites. One of the leading companies in that effort also happens to be one of the most unloved stocks in the market right now. That’s largely due to a major acquisition… Read More

Are you looking to buy a new car? Don’t pay cash.  A 48-month loan for a new car is currently just 2.58%, according to Bankrate.com. That’s below the historical rate of inflation (going back over the past half century). By the time your loan is paid off in four years, the inflation rate could exceed that 2.58% rate, meaning your real borrowing costs would actually be less than zero percent.#-ad_banner-# But don’t wait too long. Interest rates have begun… Read More

Are you looking to buy a new car? Don’t pay cash.  A 48-month loan for a new car is currently just 2.58%, according to Bankrate.com. That’s below the historical rate of inflation (going back over the past half century). By the time your loan is paid off in four years, the inflation rate could exceed that 2.58% rate, meaning your real borrowing costs would actually be less than zero percent.#-ad_banner-# But don’t wait too long. Interest rates have begun to rebound and are expected to rise gradually higher over the next few years. That auto loan rate will likely be closer to 5% in a few years.  In fact, this issue is probably being discussed in boardrooms at the top auto companies and just about any firm that relies on low-cost loans to spur demand. Corporate executives realize that consumer confidence and spending trends remain challenged, even with the aid of low interest rates. Read More

Are you looking to buy a new car? Don’t pay cash.  A 48-month loan for a new car is currently just 2.58%, according to Bankrate.com. That’s below the historical rate of inflation (going back over the past half century). By the time your loan is paid off in four years, the inflation rate could exceed that 2.58% rate, meaning your real borrowing costs would actually be less than zero percent.#-ad_banner-# But don’t wait too long. Interest rates have begun… Read More

Are you looking to buy a new car? Don’t pay cash.  A 48-month loan for a new car is currently just 2.58%, according to Bankrate.com. That’s below the historical rate of inflation (going back over the past half century). By the time your loan is paid off in four years, the inflation rate could exceed that 2.58% rate, meaning your real borrowing costs would actually be less than zero percent.#-ad_banner-# But don’t wait too long. Interest rates have begun to rebound and are expected to rise gradually higher over the next few years. That auto loan rate will likely be closer to 5% in a few years.  In fact, this issue is probably being discussed in boardrooms at the top auto companies and just about any firm that relies on low-cost loans to spur demand. Corporate executives realize that consumer confidence and spending trends remain challenged, even with the aid of low interest rates. Read More